Amid margin boom, securities companies report impressive Q3 profits
Falling interest rates led to increased margin loan balance in Q3 2023 as domestic investors found stocks more appealing than bank savings.
Falling interest rates led to an increased margin loan balance in Q3 2023 as domestic investors found stocks more appealing than bank savings.
Outstanding margin loans at securities companies reached VNĐ165 trillion by the end of Q3 2023, marking a VNĐ15 trillion increase from the previous quarter and a VNĐ43 trillion increase since the beginning of the year.
This milestone also signifies the first time in over a year that six securities companies have recorded outstanding margin loans exceeding VNĐ10 trillion, with VNDirect Securities Co (VND) and HCM City Securities Corporation (HSC) rejoining the list. Mirae Asset, SSI Securities Inc (SSI), Techcombank Securities (TCBS), and VPS Securities JSC (VPS) maintained loans above VNĐ10 trillion.
In Q3, several securities companies, including SSI Securities Inc (SSI), Techcombank Securities (TCBS), HCM City Securities Corporation (HSC), VNDirect Securities Co (VND), and MB Securities (MBS), witnessed a rise in margin loan balances compared to the end of the second quarter. TCBS experienced the most substantial increase, with a surge of over VNĐ2.6 trillion, reaching VNĐ12.8 trillion. Mirae Asset and SSI emerged as the top companies in terms of outstanding loans, with increases of VNĐ282 billion and VNĐ1.8 trillion, respectively.
Margin loan balance rose in Q3 2023 as domestic investors favoured stocks over bank savings due to falling interest rates.
Individual investors demonstrated a significant shift in behaviour, with a net purchase of VNĐ19 trillion worth of stocks in the first three quarters of this year, in contrast to a net sale of VNĐ16 trillion in the entire previous year. Moreover, a record-breaking number of new individual investor accounts were opened within the past year. In the third quarter of 2023 alone, 512,000 new accounts were opened, compared to 273,000 in the second quarter of 2023.
As a result of improved market conditions and the increased margin loan balance, most securities companies reported positive profits in the third quarter.
By October 21, 2023, a total of 78 securities companies had released their business results for both the third quarter and the first nine months of 2023.
TCBS achieved the highest pre-tax profit in the third quarter, amounting to VNĐ1.15 trillion, indicating a 57 per cent increase compared to the same period last year. However, over the course of the nine months, TCBS earned VNĐ2.15 trillion in pre-tax profit, representing a 22 per cent decrease.
SSI experienced remarkable growth, with its pre-tax profit in the third quarter being 2.1 times higher than the same period last year, reaching VNĐ880 billion. Over the nine-month period, SSI reported the highest profit in the industry, totalling VNĐ2.2 trillion in pre-tax profit, indicating a 21 per cent increase.
VNDirect's nine-month profit amounted to VNĐ1.49 trillion. In the third quarter alone, VNDirect achieved a significant surge in pre-tax profit, reaching VNĐ788 billion, which represents a 579 per cent increase compared to the same period last year. — VNS
